Japan Bank for International Cooperation (JBIC) has signed a loan agreement for an export credit line totalling US$20mn with the International Bank of Azerbaijan (IBA), the governmental financial institution in Azerbaijan. The loan was co-financed with Sumitomo Mitsui Banking Corporation (SMBC).

This facility will provide funds for Azeri firms via IBA to finance their imports of machinery and equipment from Japanese firms. This is the first export credit line JBIC has offered to a financial institution in Azerbaijan.

Endowed with abundant natural resources, and driven mainly by the oil sector, Azerbaijan achieved the world’s highest economic growth over the 2005-06 period.

Under the circumstances, infrastructure developments which underpin the economic growth are regarded as one of the crucial issues for the country. In this regard, the demand for equipment and machinery necessary for developing infrastructure will be growing day by day.

To date, JBIC’s loan commitments to Azerbaijan have largely focused on large-scale projects including oil field development projects, pipeline projects and plant projects. With Azeri trade on a recovery and robust growth path, a credit line for IBA, which has a solid client base supported by the most extensive branch network in the country, will enable it to finance a wide range of Azeri firms for their imports from Japan.

This is expected to contribute to the expansion of Japanese exports. Through strengthening the cooperation relationship with IBA, JBIC will continue to support Japanese firms in expanding business opportunities in Azerbaijan over the coming years.